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The Challenge of a True Merger
Historically, a true merger of two large organizations was considered nearly impossible; acquisitions were the norm. However, the 1989 union of Philadelphia-based SmithKline and London-based Beecham defied this belief, creating a successful "merger of equals." This case study details the organization development initiative that enabled this achievement.
The process leveraged a variety of tools, including cultural, management, and behavior analysis, competency modeling, and targeted team-building activities to successfully merge the two distinct healthcare organizations.
Unique Characteristics of the Merger
The SmithKline Beecham merger was noteworthy for several reasons, contributing to its success and historical significance:
- Industry Precedent: It was the first in a wave of consolidations within the pharmaceuticals industry during the 1990s.
- Vision-Driven: It was the first merger of its kind to be deliberately built around a vision of “integrated healthcare.”
- Record-Setting Scale: At the time, it was the largest trans-Atlantic equity swap in business history.
- Seamless Process: It navigated the complex financial and legal regulatory systems of two countries, achieving a hitch-free approval process.
A Framework for Success
This case study tells the story of this successful merger and explains the key factors behind its effectiveness. The analysis follows a structured, six-phased sequence common to organization development:
- Diagnosis
- Assessment
- Design
- Implementation
- Support
- Evaluation '''